Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
Thinking about building your new home? Make sure you’re armed with all the facts before you jump head first into your home construction.
Here’s what you need to know when building your own home:
According to the Australian Bureau of Statistics, the average costs of a home build is estimated at $473,000. Every state varies with some being more expensive than others. The estimated average cost per state and territory according to the ABS in 2023 is as follows:
Location |
Average Building Cost |
Australian Capital Territory (ACT) |
$440,000 |
Northern Territory (NT) |
$365,000 |
New South Wales (NSW) |
$349,000 |
Victoria (VIC) |
$327,000 |
Western Australia (WA) |
$298,000 |
Queensland (QLD) |
$289,000 |
Tasmania (TAS) |
$285,000 |
South Australia (SA) |
$275,000 |
On average, the building costs in Australia may range from $1,300 to $3,900 per square metre. This is dependent on the type of materials used, the size of the house, its location, economic conditions and other significant factors.
Knowing these estimates can give homebuyers a better idea of what to expect when it comes to their own home construction.
There are a lot of factors that affect the cost of your home build. Understanding how each one of the following may affect total costs can help you save money during the construction.
Aside from these factors you should also consider landscaping, fencing, and local council costs into your budget. These could potentially add up to thousands of dollars so it’s always best to include them into your calculations at the very beginning so you don’t risk overspending.
External factors also have a huge impact on house construction costs. Interruptions to the global supply chain can negatively impact prices of materials.
With previous COVID-19 restrictions and border closures coupled with the war in Russia and Ukraine, the cost of construction materials has increased significantly. Average costs of materials like timber, reinforced steel, and plastic piping rose around 20% to 40% in the past few years.
In addition to high prices of construction materials, Australia’s shortage of skilled labourers also impacted the rise of construction prices. This has also contributed to building and construction delays because of the lack of workers.
The timing of your house build could also dictate how much it’s going to cost. Keep abreast of the latest news to know what to expect when you’re ready to build your own home.
Building your own home doesn’t have to be too costly. If you play your cards right and budget efficiently it could be cheaper than buying an already-built home. Here are the top ways to save money on your home construction:
Getting your finances in order is a great way to build a budget and keep yourself from overspending. Get pre-approved for a construction loan to know how much you can comfortably afford. Don’t stretch out your budget too thin and make room for a safety net. It’s better to work at the lower end of your budget in case any issues arise.
The builder you choose could help you make your dream home come true. Or turn your home construction into a veritable nightmare. Suffice to say, you need to choose wisely.
When selecting a builder, ensure you find one that understands your needs and can work collaboratively with you. Check out different builders in your area and review their most recent works. You can check out their website or look at reviews online to gauge previous client satisfaction. Get quotes from different contractors and see if you can leverage them to get the best price.
Remember, a good builder is there to help you, not cause you more headaches. Interview them first and ask for references. It’s important to find someone who communicates well, is honest about the construction, and who help you manage costs.
In addition to building fees, you’ll also have to pay for permits, inspection fees, moving expenses, landscaping, and more. Always include these into your budget so you won’t get any nasty surprises as you go about your home construction.
Embellished finishes like polished-concrete floors, cathedral ceilings, concealed gutters, or ornate cornices are premium features that will cost you extra. If you want to cut costs, you need to keep things simple. This doesn’t mean doing the bare minimum for your home. You can still add flair with smart design choices and splurge on features that can help improve your custom home’s total value.
Avoid changing your mind or making amendments to original plan. Check the construction plan and raise any issues or concerns before the start of construction. Once building has commenced, it's going to be difficult for builders to accommodate changes which means paying extra on labour costs and additional materials.
Shop for ovens, stoves, sinks, and other appliances and fixtures yourself. It might be more convenient to have your builder fit your home with appliances and fixtures for you, but you have the potential to save a lot of money by buying these yourself. Look at different stores and retailers, you may find exactly what your home needs on sale.
Using these tips, you can make the most out of your home construction and get the best deal.
Home construction has its benefits and drawbacks. The important thing is knowing about them and understanding how each one affects your situation. Make an informed choice by keeping these pros and cons in mind:
Make sure you know what you’re getting into when you decide to build a house. Going in with the right expectations will improve your experience and expediate the process.
If you’re eager to get your home construction project started, here are ways you can finance your home build:
Australia offers homebuyers a number of grants to help them build a home. Some initiatives include:
A construction loan is the loan you take out when you want to construct your own property or for renovations.Unlike a mortgage where the lender gives you money to purchase a property, a construction loan is paid out as the construction of the home is ongoing. After a stage of the build is finished, the lender will arrange an inspection and pay the builder for that portion of work. This continues until the final phase of the home construction is complete.
You’ll only be paying interest on the amount that’s been paid to the builder. For example, the builder was paid $50,000 after the first stage of the home construction. You’ll only pay interest on that $50,000 payment. Once all payments to the builder have been made, you’ll likely then switch from interest only payments to principal and interest payments.
Contact loans.com.au and make your dream home a reality! Easily process your application online and get approved as soon as possible. Get in touch with one of our friendly lending specialists to learn more about our construction loans.
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.